Keppel Corporation Announces S$500M Share Buyback Programme

Source: www.gulfoilandgas.com 1/27/2022, Location: Asia

Keppel Corporation Limited (Keppel) has established a S$500 million Share Buyback Programme, pursuant to the Share Purchase Mandate granted by its shareholders at the Company’s Annual General Meeting.

As part of Keppel’s Vision 2030 plans, the Company has announced about S$2.9 billion in asset monetisation since 4Q 2020, received about S$2.7 billion of this in cash, and is on track to exceed its S$5 billion asset monetisation target by the end of 2023. The substantial capital unlocked from the asset monetisation programme would allow the Company to fuel its organic and inorganic growth plans, especially in areas such as renewables, clean energy and decarbonisation solutions, and also reward shareholders for their continued confidence in the Company through dividends.

With the successful asset monetisation, net gearing of the Group has decreased significantly from 0.91x as at end-December 2020 to 0.68x as at end-December 2021. Taking into consideration Keppel’s strong financial performance in FY 2021, the progress made in its asset monetisation programme, its reduced net gearing, the proposed dividends to be paid to shareholders, as well as the capital requirements for its future growth plans, the Company intends to purchase up to S$500 million of its shares via market purchases.

The Share Buyback Programme allows the Company to purchase its shares when such shares may be undervalued due to market conditions. Shares repurchased under the Share Buyback Programme will be held as treasury shares which will be used in part for the annual vesting of employee share plans, and also as possible currency for future merger and acquisition (M&A) activities under Vision 2030. As Keppel embarks on acquisitions, especially of founders’ platforms, using shares as acquisition currency would help ensure that the founders of such platforms have vested interests in the long-term success of Keppel, thereby aligning their interests with Keppel’s interests.

Keppel’s Share Purchase Mandate, as approved by shareholders at the last Annual General Meeting in April 2021, allows the purchase of up to a maximum of 2% of its issued shares for the duration of the mandate. Subject to the annual review and parameters of the Share Purchase Mandate, and depending on the prices at which shares are purchased, the S$500 million Share Buyback Programme could take more than a year to be completed.


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